Bill Livingstone
Headquarters, Washington, D.C.                     July 24, 1992
(Phone:  202/453-1898)

RELEASE 92-123

GOLDIN OUTLINES NASA PROCUREMENT REFORM

        NASA Administrator Daniel S. Goldin today announced a series of 
procurement reforms to make NASA the model of excellence for the 
Federal Government and ensure Americans receive the very best value 
for their tax dollar.

	"Through a focus on the customer, empowerment, teamwork with
our partners in industry, accountability and diversity, we can achieve
our goal and serve as a beacon to others," Goldin said in a speech to
the National Contract Management Association in Los Angeles.

	Goldin said reforms in NASA's procurement process are necessary
because 90 percent of its budget is spent through contracts.

	"We must continue to give the American people technical
advances, but we must also give them 'best' value for their tax
dollar," Goldin said.

	"In the future, NASA will not tolerate 300 percent cost
overruns, defective spacecraft hardware or the failure to
follow work instructions that protect government furnished hardware,"
Goldin said.

        "Nor will we tolerate schedule slippages," Goldin said.  "We can't 
keep letting months turn into years and years into decades."

        According to Goldin, the current procurement system teaches 
people to fear making any mistake.

        "Everyone involved in the acquisition process is swimming in 
certifications," Goldin said.  "Instead, we should be encouraging 
innovation, creativity and efficiency."

        Goldin said NASA and contractor personnel will never achieve 
excellence if they are not given clear lines of responsibility and held 
accountable for their decisions.

        Major changes in the procurement process include:

        o New contracts will be awarded to companies that have 
demonstrated they are accountable by delivering quality systems that 
meet cost schedule and technical requirements; and

        o The amount of the award fee earned will be determined by the 
end result, namely the quality, timeliness and cost of what is delivered;

        o Contractors will be given greater responsibility for success of a 
program, and should be given the opportunity for increased award fee 
if they hold to schedule, keep the program within cost estimates and 
deliver a satisfactory product.

Total Quality Management

        To determine contractor performance, Goldin said NASA will 
soon establish a joint NASA-Industry team to develop a source of "metrics" 
or measurements.

        "Once the metrics are established, NASA will publish the results 
on a generic basis, without identifying specific contractors.  On a semi-
annual basis, we will notify each CEO where their company stands," 
Goldin said.

Cultural Diversity

        Finally, Goldin said NASA will aggressively promote cultural 
diversity in the work place and to reaching its goal for Small and 
Disadvantaged Business (SDB) contracts.

        "As Administrator of NASA, I have made a personal commitment 
to increasing cultural diversity in the workplace and to increasing the 
contracting opportunities for small and disadvantaged contracts," 
Goldin 
said.

        Goldin said NASA had implemented a range of initiatives to 
increase the number of SDB contracts, including:

        o SDB considerations are part of NASA's earliest procurement 
planning, and are emphasized in acquisition strategy meetings or in 
procurement plans; and

        o In many of NASA's large prime contracts, NASA is establishing 
firm percentages of the effort to be subcontracted to SDBs and will 
reward those contractors with special incentive fees when they exceed 
the SDB requirement.

        "Small and disadvantaged businesses need assistance above and 
beyond set-asides," Goldin said.

        "In the coming months we will be setting up a new 'minority 
business resource advisory committee' in NASA to help us bring more 
SDB contractors into the NASA family," Goldin said.

        "Each of us as professionals and as citizens has an obligation to 
help overcome the barriers that divide us as a nation," Goldin said.

        "The Los Angeles riots were visual proof that we must redouble 
our efforts to help our minority citizens turn their dreams into realities," 
Goldin said.